We have investigated desorption and dissociation of O-2 chemisorbed on Ag(001) induced by collision with hyperthermal Xe and Ar atoms by high resolution electron energy loss spectroscopy and supersonic molecular beam technique. The cross section for both processes increases rapidly both as a function of angle of incidence and of total impact energy of the inert gas atom. While the increase with energy is expected, the increase with the angle is somewhat surprising arid is sensibly larger than observed for previously investigated systems. The cross section for desorption decreases moreover with coverage. In the limit of high impact energy and high coverage its value is always larger than the one for dissociation. The branching ratio between the two processes depends thereby on energy and angle of incidence of the inert gas atom. Atomic oxygen is not removed under any impact condition, because of its larger binding energy. In order to explain the experimental results, molecular dynamics simulations have been performed using a simple model including multiple scattering, We find that the angular dependence of the cross section is determined by surface corrugation and by multiple scattering which suppresses desorption at normal incidence while the energetic threshold is determined by energy loss to the substrate.